Determining flow of costs through a manufacturer’s inventory accounts Root Shoe Company makes loafers. During the most recent year, Root incurred total manufacturing costs of $26,300,000. Of this amount, $2,000,000 was direct materials used and $19,800,000 was direct labor. Beginning balances for the year were Direct Materials, $700,000; Work-in-Process Inventory, $1,500,000; and Finished Goods Inventory, $400,000. At the end of the year, balances were Direct Materials, $800,000; Work-in-Process Inventory, $1,200,000; and Finished Goods Inventory, $600,000. RequirementsAnalyze the inventory accounts to determine: Cost of direct materials purchased during the year. Cost of goods manufactured for the year. Cost of goods sold for the year.
Determining flow of costs through a manufacturer’s inventory accounts Root Shoe Company makes loafers. During the most recent year, Root incurred total manufacturing costs of $26,300,000. Of this amount, $2,000,000 was direct materials used and $19,800,000 was direct labor. Beginning balances for the year were Direct Materials, $700,000; Work-in-Process Inventory, $1,500,000; and Finished Goods Inventory, $400,000. At the end of the year, balances were Direct Materials, $800,000; Work-in-Process Inventory, $1,200,000; and Finished Goods Inventory, $600,000. RequirementsAnalyze the inventory accounts to determine: Cost of direct materials purchased during the year. Cost of goods manufactured for the year. Cost of goods sold for the year.
Chapter1: Financial Statements And Business Decisions
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Determining flow of costs through a manufacturer’s inventory accounts
Root Shoe Company makes loafers. During the most recent year, Root incurred total
Requirements
Analyze the inventory accounts to determine:
- Cost of direct materials purchased during the year.
- Cost of goods manufactured for the year.
- Cost of goods sold for the year.
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